World Bank - Grant Funding Request (GFR) Donor Version

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1 Request 11873Accounting and Auditing curricula improvement through exchange of - experience with EU member countries Donor Fund: TF Multi Donor Trust Fund for the South-South Experience Exchange Between Practitioners Donor: TF MULTIPLE DONORS Summary Information Grant Name Development Objectives Accounting and Auditing curricula improvement through exchange of experience with EU member countries The Moldovan Government has adopted the Accounting and Auditing Development Plan in the Corporate Sector for (CAP) for strengthening corporate financial reporting. The document was adopted on the basis of the Country National Development Plan, where the corporate financial reporting is included under section #Macroeconomic stability#. The CAP is a complex activity that requires significant commitment from different stakeholders, including Government agencies, regulators, academia and accounting and auditing profession. One of the national priorities of the CAP is Updating accountancy education, professional development process and public awareness. While there is some basic knowledge on modern curricula and advanced teaching methods in accounting and auditing, still there is a knowledge gap on how the improvements of curricula should be developed and implemented in line with good international benchmarks and practices, and how the modern teaching methods should be applied when modern financial reporting and auditing standards are principles-based. The core accounting and auditing curricula and methodology should be brought in line with recognized international standards to meet on-going needs of a modern accountancy education, and satisfy country#s market development. The corporate financial reporting reform priorities in Republic of Moldova are focused on four pillars which are essential for ensuring the success of the accounting and audit reforms, thus the Updating the education, the professional development process and public awareness is one of the four pillars mentioned in the Accounting and Auditing Development Plan in the Corporate Sector for (CAP). In addition, Moldova is an active participant at the Road to Europe: Program of Accounting Reform and Institutional Strengthening (REPARIS) program, which is a regional program aimed at creating a transparent policy environment and effective institutional framework for corporate financial reporting within South Central and South East Europe. The experience and knowledge gained within the Accountancy Education Community of Practice are shared with local community trough round tables and information published on the official web-site of the Ministry of Finance and Association of Professional Accountants and Auditors of Republic of Moldova, thus contributing to increase awareness of the public on corporate financial reporting reform. During the recently organized (April 2012) roundtable on modernizing accounting and auditing curricula as a follow-up event to regional REPARIS events the management of the Faculty of Accounting in ASEM expressed appreciation for the activities of the Report to Donor Page 1 of 7

2 Summary Information Grant Amount Estimated Grant Start Date / Closing Date Executed and Implemented by Benificiary Country Grant Linked to Task Team Leader (TTL) Managing Unit TTL's REPARIS program in supporting capacity development in the area of accounting education and committed to the initiatives to modernize accounting and auditing curricula. The management of the Accounting faculty already sent in May 2012 an accreditation request to an internationally recognized accountancy professional body. It is expected that the preliminary assessment will be received in September and will serve as a sound foundation for starting the process of curriculum modernization. It is expected that the modernization of the curricula as a process will start immediately after the completion of the exchange. However, it is reasonable to expect that most of it will be reflected in the curricula to be used during the education year starting in September Thus, there is a commitment at the country level (CAP adopted by the Government) and institutional level (statements by faculty management of ASEM) for modernizing accounting and auditing university education curricula. 40, USD 10/15/2012 to 10/15/2013 Bank Europe and Central Asia BY UA ROSC A&A Follow Up Mr Andrei Busuioc ECCAT abusuioc1@worldbank.org TTL's phone number Funding Window South-South Facility Grants (Legacy) This GFR includes the following sections: Basic Data Info, Basic Data - TTL Comment, Description, Project Information, Outcome, Components, Disbursement, Program Specific, Confirmation, Processing, Attachments. Report to Donor Page 2 of 7

3 Comments/Requests by TTL DESCRIPTION OUTCOME Description of Grant Outcome Indicators Grant Specific Indicators Used Accounting and auditing curricula is amended Baseline Value : The content of the analytical programs does not fully comply with the advanced practices and International Education Standards Date : 10/04/2012 Target Value : Number of exemptions by an international professional accountancy body increased by 50% Date : 12/27/2013 COMPONENTS/OUTPUTS Description of Components / Outputs No components defined. SOUTH Have you attached the indicating approval of this exchange from your Sector Manager in the SAP GFR? : Yes Have you attached the indicating approval of this exchange from the Requesting Countries Country Director/Manager in the SAP GFR? : YES Have you attached the indicating no-objection of this exchange from the Knowledge Providing Countries Director/Manager in the SAP GFR? : YES Have you attached the letter(s) from the client countries in the SAP GFR? : YES Have you attached the English translation of the letter(s) from the client countries (if applicable) in the SAP GFR? : YES Have you attached the budget report in the SAP GFR? : YES 1. Topic of proposed exchange Financial and Private Sector Development Report to Donor Page 3 of 7

4 2. Requesting Country(ies) (Low Income Countries ) (Indicate N/A if LICs are not included) Moldova 3. Requesting Country(ies) (Middle Income Countries ) (Indicate N/A if MICs are not included) N/A 4. Knowledge Providing Country(ies): Romania 5. Percentage of grant amount that will be used for Middle Income Countries (e.g. 0%,50%. 60%, 100%) 0% 6. If the experience exchange is directly linked to Bank financed projects indicate why the loan/credit, grant or recipient executed Trust Fund cannot finance the proposed experience exchange initiative No. 7. If the experience exchange is directly linked to an ongoing activity (AAA, SPN, LEN, Other) indicate why Bank Administrative Budget (BB) or other Bank Executed Trust Funds cannot finance the proposed experience exchange initiative The experience exchange is linked to the regional REPARIS program - Road to Europe: Program of Accounting Reform and Institutional Strengthening, implemented by the World Bank Centre for Financial Reporting Reform (CFRR) and with funding from Austria, Luxembourg and Switzerland. However, the proposed activity cannot be financed under the REPARIS budget as it is designed at the national level, while most part of the REPARIS activities refer to the regional level, and some national level activities that are included # are limited in nature and does not permit funding of the proposed exchange. 8. Describe the institutional capacity challenge(s) that the requesting country(ies) would like the just-in-time exchange to address. There are deficiencies in policies, rules, standards, or other formal incentives guiding the pursuit of the development goal. The core accounting and auditing curricula and methodology need to be brought in line with recognized international standards to meet on-going needs of a modern corporate financial sector in Moldova. Starting with January 1, 2012 public interest entities must to apply the requirements of the International Financial Reporting Standards (IFRS), and audit firms must to conduct audits in accordance with International Standards on Auditing and Code of Ethics. In addition, the Ministry of Finance of Republic of Moldova has initiated the development of National Accounting Standards, which are largely based on the European Union Directives and International Financial Reporting Standards and will be applied starting January 1, 2014; thus curricula in accounting and auditing need amendments accordingly to satisfy updated regulatory regime and new market needs. The exchange experience will help to obtain knowledge on how to modernize the curricula to ensure adequate practical training of students that would allow them to apply their theoretical knowledge in real situations, as well as developing fundamental professional skills. Also, the links between universities and national stakeholders in corporate financial reporting are limited and need facilitation, so that this can lead to modernizing professional certification and CPD system. 9. What is the capacity development objective that each requesting country would like this exchange to support? The capacity development objective of the proposed activity is to increase stakeholders# awareness and participation/commitment in setting priorities for improving accounting and auditing curricula and standards of Report to Donor Page 4 of 7

5 certification (in line with EU acquis communautaire, IFRS, ISA s and IES s), as well as increase their ability to act by applying new skills and knowledge. The activity will build on the results of regional activities in this area carried out under the Regional REPARIS Program, whereby common solutions are developed and proposed to participating countries. 10. What is the profile of the participants that you are targeting in each knowledge-requesting country or what is the process by which the participants will be selected? It is expected that approximately 10 participants from academia and professional body will be involved in this activity. The majority of the participants will be selected from the Accounting Faculty of the Academy of the Economic Studies of Moldova, which is the leading university in accountancy education. The participants will be university lecturers teaching most important subjects at the faculty, i.e. Financial Accounting, Managerial Accounting, Audit, Financial Reporting, Financial Management, Taxation, Analysis of the Financial statements, Business Law and Ethics. Selected participants will be those that are responsible for teaching the respective subject and also be responsible for the amendment process of the curricula within the faculty. 11. Explain how the participants are in a position to play an active role in bringing about the desired reforms to support achievement of the development goal in their countries Updating education, professional development process and public awareness is one of the national priorities of the Country Action Plan, and academia is part of it. In addition, it is expected that the vast majority of the selected participants are members of the important bodies, which are created within the Ministry of Finance in area of accounting and auditing, i.e. Accounting Methodological Council, National Committee for the review and approval of draft normative acts in accounting and auditing in the corporate sector and Auditing Supervision Council. All these will enable participants to support achievement of the proposed development goal. 12. For participants in middle income countries, indicate how they will be supported by country resources (financial or other support) and justify why additional grant support is needed. (indicate N/A if MICs are not included) n/a 13. Explain who are the knowledge provider(s) and why the experience of the specific knowledge provider(s) is relevant for the knowledge-requesting country(ies). The knowledge provider comes from the European Union member state # Romania, the faculty of Accounting and Management Information Systems, from the Academy of Economic Studies from Bucharest. The faculty was accredited by an internationally recognized accountancy professional body in 2006 and is available to offer valuable support to the Moldovan counterparts in improving the curricula and implementing advanced teaching methods ( 14. Briefly explain how knowledge providers can support the achievement of the capacity development objective(s) within the proposed timeframe and whether the grant will be used to enable the knowledge provider to do this. The faculty of Accounting and Management Information Systems will support the achievement of the intermediate capacity outcomes through providing access to the accounting and auditing curricula and teaching materials and explaining in detail how the modernization of curricula took place over recent number of years. During the period of study visit stakeholders from Moldova will benefit from participating in training classes (on-job-training) for some subjects taught, i.e. Financial Accounting, Managerial Accounting, Audit, Financial Reporting, Analysis of Financial statements, Financial Management, Taxation, Business Law and Ethics. It is expected that some materials will be available in copies for participants, and also some links will be established for follow-up contacts and exchanges. Report to Donor Page 5 of 7

6 15. What factors point to an efficient use of resources to achieve targeted results? There are several factors which will contribute to an efficient use of resources in order to achieve the proposed results: - There are no language barriers between participants and knowledge providers as both parties speak the same language (Romanian); - Romania and Republic of Moldova are neighbouring countries thus the travel costs are minimal; - Both countries have similar background. 16. What factors will help to ensure that this just-in-time exchange will be effective in contributing to the desired longer-term impact? The established contacts will enable the faculty of Accounting to maintain and develop the relationships with the similar faculty from Romania via further reciprocal exchange of experience. The Faculty of Accounting intends to start the process of modernizing accounting curricula in September 2012 with intention to obtain an accreditation from an internationally recognized accountancy professional body. In this respect the long-term interaction with the knowledge provider which already obtained such an accreditation is expected. DISBURSEMENTS Disbursement Summary in USD Date From Date To Amount in USD Amount in USD 10/15/ /31/ , , /01/ /30/ , , /01/ /31/ , , /01/ /15/ CHECKLIST The agreement governing the use of funds under this Donor fund requires, inter alia, that: Remember to attach the following documents: s from the Country Directors, Sector Manager, a signed letter from the Ministry of the requesting client country; the English translation, budget report As Task Team Leader (TTL) for this grant, I confirm that the activities this grant will finance and the proposed use of grant funds comply with the above requirements. Mr Andrei Busuioc on 10/04/2012 As Window Manager for this grant, I confirm that the activities this grant will finance and the proposed use of grant funds comply with the above requirements. Ms Degi Young on 10/09/2012 PROCESSING Cleared/Approved by UPI Name Date Action Team Member Team Leader Mr Andrei Busuioc 10/04/2012 Submitted Manager Mr Henri Fortin 10/04/2012 Cleared Regional South-South Mr Francois Nankobogo 10/04/2012 Cleared Coord. Country Director Mr Abdoulaye Seck 10/04/2012 Cleared Report to Donor Page 6 of 7

7 Chief Administration Ms Helga W. Muller 10/04/2012 Cleared Officer Window Manager Ms Degi Young 10/09/2012 Approved Program Manager Ms Julie D. Knowles TACT DOCUMENTS ATTACHED GFR_MD-final-1-1.docx Ltr from ASEM re SEETF Jun _eng.docx ASEM_letter.PDF _TF pdf South-South Facility budget report_md.xlsx Clearance CM - applying country.docx Clearance CD - receiving country.docx Clearance SectorM.docx Report to Donor Page 7 of 7